BEIJING: China has been dramatically dropping its holdings of U.S. Treasuries.

Yahoo Finance reports that, "According to a government report released in June, China’s (FXI) holdings of U.S. Treasuries (TLT) declined for the third straight month in June 2014. China held 1.26 trillion in U.S. debt as of April 30, 2014, according to the report. This is an $8.9 billion decline from March. This fact is particularly significant given that China (FXI) is the largest foreign holder of U.S. Treasuries (IEF). According to data compiled by Bloomberg, analysts have seen this decline in holdings for three consecutive months."

China and Russia have drawn closer together as the European Union and the United States have increased sanctions and diplomatic tensions on Moscow.

As reported by Yahoo Finance, "According to a joint statement from Russia and China on the partnership and strategic cooperation, Russia and China are planning to bypass the dollar and increase the volume of direct payments in their national currencies. This would threaten the dominance of the petrodollar and could be a huge blow to the economy if other nations follow suit."